Australians hire movie star to pull wool before Chinese buyers' eyes

Wool growers in Australia are enlisting movie star Yin Xiaotian to convince China's growing ranks of businessmen that wearing a 1200 yuan ($218) Australian wool suit is the key to success.

Australian Wool Innovation, a trade group financed by growers in the world's number one wool-producing nation, hired the star of last year's Huayao Bride in Shangri-La to model the wool-blend, machine-washable suit during a promotional tour to Beijing, Shanghai and other cities next month.

Australian wool growers and sellers such as Futuris and AWB are counting on demand from China to halt a 45 per cent drop in benchmark prices in the past three years as European and US customers switched to cotton and synthetics.

China is already the world's biggest wool buyer, accounting for 60 per cent of Australia's exports.

"The Chinese domestic market is one of the few markets over the last 10 or 15 years that we've seen growth in, in particular in menswear," said Chris Wilcox, chief economist at Woolmark, a Melbourne-based wool research and testing company.

"The volume growth we've seen in China, and will continue to see, will be very important in raising prices."

Average annual incomes in China's urban areas have almost doubled in the past five years to about US$1500 ($2200) and economic growth has topped 9 per cent for nine quarters in a row, Government figures show. China surpassed Western Europe in 2000 as the world's number one consumer of wool.

"Income and wealth in China from an individual basis is growing year in, year out, and more of that will be spent on suits and other items," said Tim Keith, the Sydney-based head of agribusiness treasury management at National Australia Bank, the nation's largest lender by assets.

Wool growers in Australia are seeking new sources of demand to boost prices from their lowest in almost six years. Australian benchmark wool prices fell to A$6.32 ($6.95) a kilogram on December 14, the lowest since February 2000.

The US$149 suit is one way to reach China's growing population of white-collar workers. The promotional tour for the suit, being manufactured by Jiangsu-based textile company Heilan Group, will include a demonstration of the garment spinning in a washing machine outside Heilan stores in the cities of Beijing, Shanghai, Nanjing and Zhengzhou.

In addition to modelling the suit, Yin will appear on posters advertising it in stores.

Mark Rodda, national wool manager at Futuris' Adelaide-based Elders unit, Australia's biggest wool seller, welcomes the push to market to China's young professionals.

"Anything that brings better returns to our clients, to wool growers, is wonderful news," Rodda said.

Fibre consumption in regions such as China and India is expected to double as incomes rise, Stephanie Lowe, a Sydney-based wool analyst for Rabobank Group, the world's largest agricultural lender, said in an October research report. China and eastern Europe are the only regions where wool consumption isn't poised to decline, according to the report.

Rising demand in emerging markets may counter a slowdown in wool sales in Europe, where younger shoppers favour clothes made of cotton or synthetic fibres, Woolmark's Wilcox said.

"Consumers, particularly younger consumers, have lost touch with wool and what it means," he said.

Because China is still poor compared with mature markets such as Europe, keeping prices low is crucial to capturing market share, said Jeff Zhu, Australian Wool Innovation's representative in Beijing.

- BLOOMBERG